An entrenched network of allegedly corrupt Customs officers at Sydney Airport has been importing drugs with organised crime figures for several years.

At least 15 officials in Sydney Airport’s border security posts are suspected of involvement in serious misconduct or corruption, ranging from criminal association and leaking information, to drug trafficking, drug manufacturing, money laundering and bribery. The number may be as high as 20.

A six-month
Fairfax Media
investigation can reveal the cell has been exploiting major gaps in airport and Customs security to smuggle millions of dollars of narcotics and drug money past border controls and on to Australia’s streets.

Corrupt airport baggage handlers are also allegedly involved. The allegedly corrupt cell has been operating since at least 2009 from the international passenger terminal and freight section and is suspected successfully to have imported pseudoephedrine, cocaine and steroids, and possibly weapons.

Property, court and business records, social media sites and multiple well-placed sources link members of the cell to Sydney-based crime figures, including underworld figure Alex “Little Al" Taouil, drug traffickers Joseph Harb and Diego Refojos, and members of the Comancheros outlaw bikie gang and Middle Eastern crime groups.

The scandal is regarded as extremely serious because of the scale of the alleged corruption and the failure of the Customs Service –which was led until August by career public servant
Michael Carmody
– to act on multiple warning signs that the organisation was badly exposed to corruption.

SOME CUSTOMS OFFICERS HAD KNOWN CRIMINAL ASSOCIATIONS

The Customs agency has employed officers with known criminal associations and allowed relatively junior officers to wield significant influence over other staff by having the power to manage rosters.

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Leaked Customs documents dating back to 2007 detail multiple internal warnings that Customs lacked the power, resources and ability to detect corruption and that its anti-corruption framework was “outdated and requires revision".

In response to questions sent on Monday, acting Customs chief executive Mike Pezzullo stressed that the agency had made major improvements to its corruption-busting system. Mr Pezzullo conceded ‘‘more needs to be done’’ and said he would ‘‘take all necessary action’’, including launching an agency-wide review of ‘‘workplace culture, management and leadership . . . to ensure the integrity of our workplace’’.

He said Customs’ ‘‘internal oversight systems’’ had helped to identify corruption risks at Sydney Airport in 2011 but ‘‘clearly more can be done’’. In conjunction with the ABC’s 7.30 program, Fairfax traced drugs seized last March by the NSW police drug squad in an apartment in the Sydney suburb of Woolooware to one of several drug consignments allegedly smuggled past border controls by Customs officials at Sydney Airport.

Diego Refojos, 24, recently pleaded guilty in the NSW District Court to serious drug offences connected to the Woolooware raid. It is believed he was linked to earlier drug importations that have not been recovered by authorities.

ALLEGED CELL SUSPECT ALLOWED TO KEEP WORKING DESPITE DRUG LINK

It is understood two allegedly corrupt Customs officials were at the Woolooware apartment and left before the drug squad arrived.

A small number of Customs officers are suspected to have helped manufacture into drugs the pre-cursor chemicals they allegedly smuggled into the country.

One of the alleged key players in the cell is airport Customs officer Paul Adrian Lamella, who has suspected links to Mr Taouil, Mr Refojos and Mr Harb. Mr Lamella was arrested by federal police on Monday and charged with offences involving drug importation and corruption.

Mr Lamella kept his job at Customs despite NSW police alleging in 2008 that they discovered him in a car with two other men and five small bags stamped with Playboy bunny logos and filled with cocaine.

Also, Mr Lamella’s Customs position and security clearance were not affected when he later admitted using a small amount of cocaine.

Property records show that in 2010 Mr Harb transferred his share in a Sydney apartment to Mr Lamella.

Mr Harb was arrested in August by federal police and charged with smuggling drugs through Sydney Airport.

GOVERNMeNT TASKFORCE MARCA ARRESTS SUSPECTS

For several months Fairfax and the ABC have delayed releasing details of the “Customs in crisis" inquiry at the request of a joint anti-corruption taskforce, codenamed Marca, run by the Australian Commission for Law Enforcement Integrity (ACLEI) and the Australian Federal Police. ACLEI and the AFP have refused to provide any detailed comments about Marca because it is an ongoing inquiry, although ACLEI confirmed it was investigating ‘‘corrupt conduct in border environments’’.

Court records reveal that taskforce Marca arrested Mr Lamella in Sydney this week and charged him with drug trafficking and bribery.

In August, another Customs officer, Paul Katralis, was arrested and charged by the taskforce with drug trafficking and bribery.

Several other allegedly corrupt Customs agents at Sydney Airport, including officers with strong links to drug traffickers, are still working for the agency. Broader ethical and integrity failings in Customs are not being investigated by Marca.

The revelations will put intense pressure on the federal government to explain why suspected corrupt officers are still working and why there are gaping holes in airport border security, despite multiple warnings from police and official inquiries, including the 2005 Wheeler report on security problems at Sydney Airport.

While up to 20 Customs officers are suspected to have engaged in a range of serious misbehaviour, it is understood a core group of up to 10 officers is believed to be responsible for drug trafficking.

DRUG-FILLED BACKPACKS ALLOWED THROUGH CUSTOMS

A range of well-placed sources, including figures at the airport, told Fairfax that their activities include:

Allowing drug money to be smuggled through the airport and out of Australia to fund the re-supply of drugs to be smuggled back through the airport.

The Customs anti-corruption reform process has been expedited by Home Affairs Minister
Jason Clare
, who is believed to have been briefed on taskforce Marca’s work earlier this year and to have raised concerns at Customs’ failure to have adequate anti-corruption measures in place. Even the simplest of the changes called for in late 2007 – the renaming of the internal affairs unit – took more than two years to implement.

A high-level internal customs memo from November 2007 warned that Customs’ internal affairs unit had “insufficient case management resources and capability", and that despite calls for anti-corruption reforms “no action has been taken at this time".